Washington University Law Review Volume 84 Issue 5 Bloggership: How Blogs Are Transforming Legal Scholarship January 2006 Forgotten Lessons from the Common Law, the Uniform Residential Landlord and Tenant Act, and the Holdover Tenant Christopher Wm. Sullivan Follow this and additional works at: http://openscholarship.wustl.edu/law_lawreview Part of the Common Law Commons Recommended Citation Christopher Wm. Sullivan, Forgotten Lessons from the Common Law, the Uniform Residential Landlord and Tenant Act, and the Holdover Tenant, 84 Wash. U. L. Rev. 1287 (2006). Available at: http://openscholarship.wustl.edu/law_lawreview/vol84/iss5/23 This Note is brought to you for free and open access by the Law School at Washington University Open Scholarship. It has been accepted for inclusion in Washington University Law Review by an authorized administrator of Washington University Open Scholarship. For more information, please contact [email protected]. FORGOTTEN LESSONS FROM THE COMMON LAW, THE UNIFORM RESIDENTIAL LANDLORD AND TENANT ACT, AND THE HOLDOVER TENANT Property law contains some rules that have been around for centuries and others that have just been created. It is an evolving subject. Moreover, there is a fair amount of disagreement among the states on how to adjudicate property disputes. These differences in approach arise partly because property law protects multiple, conflicting goals and values and states have differences of opinion on how to resolve those conflicts.1 INTRODUCTION With ancient concepts such as seisin and escheat,2 and relatively recent innovations like the implied warranty of habitability,3 property law is both old and new. Within this hodgepodge, disputes arise and interests clash. New rules are fashioned from time to time to displace the old in an attempt to better balance those competing interests. This interplay is particularly apt in the holdover-tenant situation. The holdover rule, long recognized at common law, imposes a harsh penalty on the unwary tenant.4 It gives a landlord a unilateral election to treat a tenant who remains on the premises after the expiration of the lease as a trespasser, or, alternatively, to consent to the continued occupancy and hold the tenant to a new term.5 Importantly, this election often is available regardless of whether the tenant consents.6 Here is a prime situation in which various interests face off: a landlord has an interest in securing any rental income potentially disrupted by the holdover tenant, an incoming tenant seeks assurance that the property will be available at the start of the lease, and the tenant 1. JOSEPH WILLIAM SINGER, INTRODUCTION TO PROPERTY § 1.3.1, at 9 (2001). 2. For seisen, see infra notes 38, 41. Escheat, a concept long identified at English common law, remains viable “in the United States in the sense that if a person dies intestate with no descending, ascending or collateral heirs, the property passes to the state.” CORNELIUS J. MOYNIHAN & SHELDON F. KURTZ, INTRODUCTION TO THE LAW OF REAL PROPERTY § 7, at 20 n.5 (3d ed. 2002). For an American case applying the concept of escheat, see, for example, In re O’Connor’s Estate, 252 N.W. 826 (Neb. 1934). 3. See infra notes 18–19 and accompanying text. 4. See ROBERT S. SCHOSHINSKI, AMERICAN LAW OF LANDLORD AND TENANT § 2:23, at 72 (1980) (suggesting that the severity of the sanction to the tenant outweighs the alleged benefits of the holdover rule). 5. 2 MILTON R. FRIEDMAN, FRIEDMAN ON LEASES § 18.4, at 1232 (4th ed. 1997). 6. Id. at 1232–33; see also infra notes 97–108 and accompanying text. 1287 Washington University Open Scholarship p 1287 Sullivan book Pages.doc9/24/2007 1288 WASHINGTON UNIVERSITY LAW REVIEW [VOL. 84:1287 remaining behind has an interest in not being subjected to an abnormally harsh penalty against his or her will.7 Various rationales have been advanced for giving the landlord this choice, and various rules have been crafted to deal with this situation, each emphasizing different interests. Some favor certainty while others favor equity, and, consequently, dispute as to the best solution persists. This Note examines the treatment of the holdover tenant in the residential setting and, specifically, the solution promulgated by the Uniform Residential Landlord and Tenant Act (“URLTA” or “the Act”).8 Drafted in 1972 by the National Conference of Commissioners on Uniform State Laws9 in the midst of a “revolution” in landlord-tenant law,10 URLTA was the flagship reform.11 The Act, among other things, sought to free the landlord-tenant relationship from the antiquated common-law system and replace it with a matrix better suited to the modern-day residential lease.12 A successful venture, URLTA has been adopted, in full or in part, by several states.13 But while URLTA is largely salutary,14 this Note contends that with respect to holdover tenancies, URLTA falls short. The Act’s attempted solution to the holdover problem provides inadequate protection for tenants from overreaching landlords and, in practice, furthers no substantial interest other than the landlords’ in having a continuous stream of rental income. Thus, I contend, the Act fails to fully embrace the spirit of the revolution in landlord-tenant law. To fully appreciate URLTA’s treatment of the holdover tenant, it is important to understand the setting in which it was drafted. Accordingly, 7. See SCHOSHINSKI, supra note 4, at 72. 8. UNIF. RESIDENTIAL LANDLORD AND TENANT ACT, 7B U.L.A. 531 (2000) [hereinafter URLTA]. 9. Richard E. Blumberg & Brian Quinn Robbins, Beyond URLTA: A Program for Achieving Real Tenant Goals, 11 HARV. C.R.-C.L. L. REV. 1, 3 n.5 (1976). 10. See infra notes 53–73 and accompanying text. 11. Among other things, a stated purpose of the Act was to unify residential landlord-tenant law. See URLTA § 1.102(b)(3). In this vein, URLTA codified several contemporary legal developments such as the implied warranty of habitability. Id. § 2.104 cmt. 12. Nat’l Conf. of Comm’rs on Unif. State Laws, A Few Facts About the Uniform Residential Landlord and Tenant Act, http://www.nccusl.org/Update/uniformact_factsheets/uniformacts-fs-urlta. asp (last visited Nov. 9, 2006). Indeed, one of the Act’s stated purposes is “[t]o remove the landlord and tenant relationship from the constraints of property law and establish it on the basis of contract with all concomitant rights and remedies.” Id. 13. See id. 14. Some commentators have criticized URLTA as being “only marginally effective, benefiting primarily middle-income tenants in the suburbs or the cities’ better neighborhoods, while largely failing in the aim of helping the inner-city poor and upgrading the quality of slum housing.” Samuel Jan Brakel & Donald M. McIntyre, The Uniform Residential Landlord and Tenant Act (URLTA) in Operation: Two Reports, 1980 AM. B. FOUND. RES. J. 555, 559 (1980). http://openscholarship.wustl.edu/law_lawreview/vol84/iss5/23 p 1287 Sullivan book Pages.doc9/24/2007 2006] COMMON LAW, URLTA, AND THE HOLDOVER TENANT 1289 Part I.A briefly traces the development of the landlord-tenant relationship through the landlord-tenant revolution in the late 1960s and early 1970s. In Part I.B, the common-law holdover rule is discussed, with various rationales advanced for it and some state attempts to solve the problem. Part I.C identifies the incoming tenant’s interest in having the premises open and alternative views on the landlord’s duty to deliver possession, as well as the special problems of the form lease. Next, Part D introduces URLTA and its various sections dealing with the holdover situation. Part II illustrates how landlords are able to undo those provisions to write in more favorable holdover provisions, and, additionally, how landlords’ selective use of these provisions will not promote the holdover rule’s goals and justifications. Part III is a proposal for change, with suggestions aimed at better capturing the spirit of the landlord-tenant revolution to protect tenants while balancing both parties’ interests. I. HISTORY Shelter is fundamental, but for many the so-called American dream of owning a home is neither possible nor desirable, and, as such, the residential lease provides a popular alternative.15 Given this prevalence, all states have extensive statutory and case law regulating the landlord-tenant relationship.16 These laws can, much of the time, reasonably be characterized as pro-tenant.17 A paradigmatic example is the implied warranty of habitability, which charges landlords with a nonwaivable obligation to maintain leased premises and gives tenants the right to withhold rent in the event of a landlord’s delinquency.18 All would agree that this rule is intended to benefit tenants.19 Such a notion was unknown 15. See Debra Pankow, To Buy or Rent? The Choice, N.D. St. Univ. Extension Serv. Publ’n FE- 241 1 (2002), available at http://www.ext.nodak.edu/extpubs/yf/fammgmt/fe241.pdf (identifying rising real estate prices and diminishing investment returns from home ownership). Leasing a home or apartment affords several advantages over purchasing, such as lower upfront and ongoing costs, fewer obligations regarding upkeep, and a more flexible length of term. Id. at 2–3. 16. See, e.g., Legal Info. Inst., State Statutes by Topic, http://www.law.cornell.edu/topics/ state_statutes3.html#property (last visited Mar. 4, 2006) (listing various state property codes). 17. See Edward H. Rabin, The Revolution in Residential Landlord-Tenant Law: Causes and Consequences, 69 CORNELL L. REV. 517, 521 (1984) (contending that almost all changes of the landlord-tenant-revolution era have favored the tenant). 18. See SINGER, supra note 1, § 10.1 at 411–14. 19. Some contend, however, that pro-tenant legal rules, such as the implied warranty of habitability, can negatively impact tenants—and exclude potential tenants—by increasing the cost of doing business and ultimately lead to higher rents.